Binance Security Breach: Consumer Exposure and Interim Safeguards

Baroness Kramer Excerpts

Tuesday 3rd November 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

We are looking to learn from what happened at Binance, but I am not clear that it makes sense to put in an interim arrangement. By October next year, we will have a comprehensive FCA regime for crypto assets, including disclosure, market abuse and resilience. To put that in place requires changes by the firms, and it then requires authorisation. There will be an iterative process there, and I think it might not be helpful to have an interim regime in the middle of that. It would perhaps slow things down.

[Baroness Kramer (LD)]

My Lords, the hacking of Binance demonstrates that large-scale theft is far more possible in a crypto world. At present, UK banks are resisting providing accounts, financial services and credit lines to crypto service providers, but that is expected to change in the next year when the FCA’s crypto providers authorisation scheme kicks in. What would be the consequence to bank stability of such a heist happening after that authorisation and the relationship created between the banks and the crypto world? Would the banks be covering the losses? It is certainly unclear who is covering the losses now.

[Lord Pitt-Watson (Lab)]

I am not quite sure what heist the noble Baroness has in mind. We can say that, right now, the Financial Stability Board does not believe that crypto assets are a systemic risk to the financial system, but if she would like to write to me with her thoughts on how this heist might come about to affect one of the large banks, I would be very interested to read that.